CBS chief operating officer Joseph Ianniello said the broadcaster expects $2.5 billion in retransmission consent and reverse compensation revenue by 2020, a $500 million increase from its previous forecasts.
Ianniello, speaking at CBS’ Investor Day in New York, added that the broadcaster believes it can generate $800 million in additional revenue over the next five years from its Showtime OTT and CBS All Access over the top services.
Ianniello said the retrans increase is a direct result of CBS’ ability to receive fair compensation for its broadcast content and for out of home rights. He added that the figure includes less than $3 per month per subscriber in retrans revenue, less than $2 per month per subscriber from reverse compensation from affiliates.
Ianniello added that the $800 million in expected OTT revenue will be split evenly between its Showtime OTT service and CBS All Access. For Showtime to achieve $400 million in revenue, it would need to add about 4 million incremental subscribers over the five-year period, which he said is achievable, given the 90 million U.S. homes that don’t subscribe to the premium channel. Reaching that revenue level would require the channel capture about 5% of that universe. He added that Showtime’s linear service already has about 20% penetration.
For CBS All Access, Ianniello said the network receives about $5 per month in revenue per subscriber from the monthly fee for the service and another $3.50 per month per subscriber in advertising revenue. Reaching the $400 million revenue goal would mean attracting another 4 million customers, which Ianniello again said was easily achievable.
The two revenue sources are part of CBS’ Four Pillars of Growth for the next five years – the other two are international syndication and revenue from skinny bundle providers. Ianniello said the network could attract $800 million from international in the period and another $450 million from skinny bundle providers.
In a question and answer session with analysts after the presentations, CBS CEO Les Moonves addressed speculation that the broadcaster was interested in buying rival premium network Starz by saying that he looks at every deal.
“I think the answer is we look at everything,” Moonves said. “Every name of every company that is for sale, we’ve looked at it. But there is nothing we are going to do that won’t make total sense for us. Joe [Ianniello] and his team are looking at every deal that comes down the pike, but we haven’t done anything in a long time.”
The smarter way to stay on top of the multichannel video marketplace. Sign up below.
Thank you for signing up to Multichannel News. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.